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While NBA teams can use the stretch provision all season long, Aug. 31 represents a key deadline related to the rule. Players who are waived by Aug. 31 can have their current-year salaries stretched, immediately reducing their 2018-19 cap charge. If a player is released after Aug. 31, his current cap hit will remain unchanged, and only the subsequent years of his contract will be stretched.

As we detail in our glossary entry on the subject, the stretch provision is a rule ensuring that any player waived with at least $250K in guaranteed salary remaining on his contract will have the payment schedule of that money spread across multiple years. Teams also have the option of spreading his cap charges across the same number of years.

That schedule is determined as follows:

  • If a player is waived between July 1 and Aug. 31, his remaining salary is paid over twice the number of years remaining on his contract, plus one.
  • If a player is waived between Sept. 1 and June 30, his current-year salary is paid on its normal schedule, with any subsequent years spread over twice the number of remaining years, plus one.
    • Note: If a player in the final year of his contract is waived between Sept. 1 and June 30, the stretch provision does not apply.

For instance, as the Knicks mull whether or not to waive
Joakim Noah, here are the options they’ll consider:

Year Leave contract as is
 
Stretch by 8/31/18
 
Stretch after 8/31/18
 
2018/19 $18,530,000 $7,565,000 $18,530,000
2019/20 $19,295,000 $7,565,000 $6,431,666
2020/21 $7,565,000 $6,431,667
2021/22 $7,565,000 $6,431,667
2022/23 $7,565,000

In Noah’s case, there’s essentially no incentive for the Knicks to waive and stretch him by Aug. 31. The team – well over the cap for 20180-19 – wouldn’t be able to take advantage of the extra cap flexibility this season. As such, it makes more sense to keep him on the roster for now and to start considering the possibility of his release sometime after September 1.

The same logic that applies to Noah and the Knicks applies to most teams around the NBA. Outside of perhaps Rodney Hood, there just aren’t many free agents left who are worth using cap room on, so teams aren’t clamoring to create additional space for the 2018/19 season. In other words, we shouldn’t expect to see many players on expensive contracts hit waivers in the next week.

There are a couple of potential exceptions worth watching. The Kings, for instance, have about $11M in cap room and are currently carrying 16 players on guaranteed contracts. If they decide they want to waive a veteran like Iman Shumpert to get down to 15 players for the regular season, it might make some sense to stretch him by Aug. 31. That would reduce his $11M+ cap charge to just $3.67M for 2018-19, opening up another $7M+ in cap space for Sacramento.

Again though, unless the Kings have a use in mind for that cap room, they’ll likely be reluctant to add extra salary to their cap for two subsequent seasons by stretching Shumpert’s 2018-19 salary. The same can be said of the Suns, who are currently hovering just below the $101.869M salary cap in terms of total guaranteed salary.

Phoenix is reportedly expected to buy out Darrell Arthur, and if the team does so within the next week, it could trim his $7.46M cap hit to about $2.49M, opening up additional cap room. Like the Kings, the Suns would have to have a clear purpose in mind for that space in order to justify adding extra money to their books for two future seasons.


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